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Defined Benefit

The Weekly Wrap: August 9 edition

By Lisa Botter | August 9, 2013

A round-up of the pensions industry stories published across the FT Group – from the impact of fiduciary management on the investment industry, to a change of direction for the Bank of England.

Asset managers face fiduciary freeze

Week in numbers 

  • 38% of asset managers think fiduciary management will have a negative impact on schemes
  • £31.3bn pension liability for Lloyds Banking Group
  • BoE will not raise interest rates until unemployment reaches 7%

FTfm: Asset managers fear the rise in use of fiduciary management could have a negative impact on business, a report from Cerulli Associates has found, as it would be more difficult to sell products with a fiduciary manager standing in the middle. The report also found 38 per cent of respondents suspect full delegation would be negative for pension funds and would not help them better invest.

Lloyds racks up UK’s third-biggest pension liability at £31.3bn

FT: Lloyds Banking Group has the third-largest pension liability in the UK, consultancy LCP has found in its annual survey of pension schemes. The bank’s defined benefit liabilities were £31.3bn at the end of 2012, up from £28.2bn in 2011. The survey also found schemes were slightly less well funded at the end of 2012 compared with the previous year.

Carney ties UK rates to jobs data

FT: The Bank of England will keep interest rates at 0.5 per cent until unemployment has fallen to 7 per cent, which is not expected until at least mid-2016. The use of explicit forward guidance marked a significant shift in strategy under new governor Mark Carney. He said Britain’s economy is recovering but still remains weak.

Hedge fund interest on the up despite LDI dominance

MandateWire: Nordic pension scheme interest in hedge funds is on the rise due to lower fees, bespoke products and better performance. Data found inflows into hedge funds in 2013 was already £1.1bn compared with £917m in all of 2012. But many UK pension schemes cited the need to derisk as one of the reasons why they are abandoning or reducing allocations to hedge funds.

Pension sues manager over transparency issues

FundFire: The pension fund of tyre manufacturer Bridgestone Americas is suing hedge fund Westford Asset Management to receive information related to a $75m (£48.2m) investment. The last time the company received year-end statements was in 2007. The pension fund said attempts to gain information have been evaded. Bridgestone is seeking a court order forcing the hedge fund to produce documentation, honour its pension funds’ investments, repay fees and pay damages.

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This week's social media comment

In response to Pensions Week's story on Fidelity's appointment of PTL as professional trustee for its mastertrust, Aviva's John Lawson tweeted:

 
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